Employment continues its sluggish recovery along racial lines in the third quarter of 2016

In September 2016, the national unemployment rate increased to 5.0 percent, a slight uptick from 4.9 percent at the end of the second quarter in June 2016. Over the third quarter, 19 states saw their unemployment rates decline, while 30 states saw unemployment rise. Twenty states and the District of Columbia have unemployment rates below their prerecession levels. State unemployment rates ranged from a low of 2.6 percent in South Dakota to a high of 6.7 percent in Alaska. Consistent with the long-standing trend at the national level, African Americans had the highest unemployment rate at 8.4 percent, followed by Hispanics (5.7 percent), whites (4.9 percent), and Asians (3.9 percent).

State unemployment rates, by race and ethnicity

The following is an overview of racial unemployment rates and racial unemployment rate gaps by state for the third quarter of 2016. We provide this analysis on a quarterly basis in order to generate a sample size large enough to create reliable estimates of unemployment rates by race at the state level. We only report estimates for states where the sample size of these subgroups is large enough to create an accurate estimate.

Trends among whites

In the third quarter of 2016, the white unemployment rate was lowest in South Dakota (1.2 percent) and highest in West Virginia (6.2 percent), as shown in the interactive map, which presents state unemployment rates by race and ethnicity. South Dakota also had the lowest white unemployment rate in the preceding four quarters, while West Virginia has had the highest white unemployment rate for six consecutive quarters.

Interactive Map

State unemployment rates, by race/ethnicity and overall, 2016Q3

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Table 1 displays changes in state unemployment rates by race and ethnicity from the fourth quarter of 2007 to the third quarter of 2016. Consistent with the first half of the year, Wyoming is the state where the white unemployment rate is most elevated above its prerecession level—2.7 percentage points higher than in the fourth quarter of 2007. On the other hand, the white unemployment rate is at or below its prerecession level in 24 states: Arkansas, California, Colorado, District of Columbia, Hawaii, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, Nevada, North Carolina, Ohio, Oregon, Rhode Island, South Dakota, Tennessee, Virginia, Vermont, and Wisconsin. In the second quarter of 2016, half of the states had reached this milestone, although some of the states on the list have changed. In another 15 states, the white unemployment rate was within 0.5 percentage points of its precession level.

Table 1

Change in state unemployment rates by race and ethnicity, 2007Q4–2016Q3 (percentage points)

State

White

Black

Hispanic

Asian

USA

0.0%

-0.2%

-0.2%

0.4%

Alaska

0.7%

NA

NA

NA

Alabama

1.0%

3.7%

NA

NA

Arkansas

-1.8%

-1.0%

NA

NA

Arizona

0.7%

NA

2.3%

NA

California

-0.3%

-2.0%

-0.8%

-0.7%

Colorado

-0.5%

NA

-0.4%

NA

Connecticut

1.1%

NA

0.5%

NA

District of Columbia

-0.1%

2.8%

NA

NA

Delaware

0.2%

2.1%

NA

NA

Florida

0.2%

1.6%

-1.6%

NA

Georgia

0.4%

0.0%

-2.9%

NA

Hawaii

-0.9%

NA

NA

0.3%

Iowa

0.3%

NA

NA

NA

Idaho

0.5%

NA

NA

NA

Illinois

0.5%

1.9%

1.8%

-0.1%

Indiana

0.1%

-0.9%

NA

NA

Kansas

-0.6%

NA

NA

NA

Kentucky

-0.3%

NA

NA

NA

Louisiana

2.2%

1.5%

NA

NA

Massachusetts

-1.2%

NA

NA

NA

Maryland

0.2%

1.7%

NA

NA

Maine

-1.4%

NA

NA

NA

Michigan

-2.4%

-5.7%

NA

NA

Minnesota

-1.4%

NA

NA

NA

Missouri

-1.1%

-2.5%

NA

NA

Mississippi

0.7%

-2.1%

NA

NA

Montana

0.1%

NA

NA

NA

North Carolina

-0.2%

0.5%

-0.3%

NA

North Dakota

0.4%

NA

NA

NA

Nebraska

-0.1%

NA

NA

NA

New Hampshire

-0.8%

NA

NA

NA

New Jersey

0.0%

-1.3%

0.3%

3.9%

New Mexico

0.5%

NA

1.2%

NA

Nevada

-0.6%

NA

-0.7%

5.1%

New York

0.4%

-1.7%

-1.1%

0.5%

Ohio

-0.3%

-2.7%

NA

NA

Oklahoma

0.7%

NA

NA

NA

Oregon

-1.1%

NA

NA

NA

Pennsylvania

0.2%

4.4%

NA

NA

Rhode Island

-0.7%

NA

NA

NA

South Carolina

0.9%

-2.4%

NA

NA

South Dakota

-0.8%

NA

NA

NA

Tennessee

-1.2%

-1.5%

NA

NA

Texas

0.4%

-1.2%

0.0%

1.4%

Utah

1.1%

NA

-0.1%

NA

Virginia

0.0%

0.9%

-0.9%

NA

Vermont

-1.1%

NA

NA

NA

Washington

0.9%

NA

0.4%

-0.6%

Wisconsin

-0.2%

NA

NA

NA

West Virginia

1.5%

NA

NA

NA

Wyoming

2.7%

NA

NA

NA

Note: The table only reports data for state subgroups with sample sizes large enough to create accurate estimates.

Source: EPI analysis of Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) data and Current Population Survey (CPS) data

Trends among African Americans

During the third quarter of 2016, the African American unemployment rate was lowest in Vermont (6.2 percent) and highest in Illinois (14.2 percent). Illinois has had the highest unemployment rate for four consecutive quarters. Since the fourth quarter of 2015, the black unemployment rate in Illinois has risen 1.1 percentage points as unemployment has increased 0.7 percentage points statewide. Consistent with last quarter, seventeen states had African American unemployment rates below 10 percent in the third quarter of 2016—in 12 of these states, the rate was lower than the third quarter national average for African Americans (8.4 percent).

As shown in Table 2, which displays the black-white and Hispanic-white unemployment rate ratios in the third quarter of 2016, New York’s black-white unemployment rate gap was the smallest in the country. In that state, the black unemployment rate was 1.5 times the white rate during the previous quarter. This change was due to a decrease in the state’s black unemployment rate at the same time that whites increased their likelihood of unemployment. The largest gaps were in the District of Columbia, where the black unemployment rate was 8.0 times the white rate, and Illinois, where the black unemployment rate was 2.9 times the white rate.

Table 2

Black–white and Hispanic–white state unemployment rate ratios, 2016Q3

State

Black-white ratio

Hispanic-white ratio

USA

2.1

1.4

Alaska

NA

NA

Alabama

2.2

NA

Arkansas

2.7

NA

Arizona

NA

2.0

California

1.8

1.4

Colorado

NA

1.6

Connecticut

NA

1.9

District of Columbia

8.0

3.0

Delaware

2.3

NA

Florida

1.9

1.0

Georgia

2.2

1.1

Hawaii

NA

NA

Iowa

NA

NA

Idaho

NA

1.2

Illinois

2.9

1.5

Indiana

2.4

NA

Kansas

NA

1.8

Kentucky

NA

NA

Louisiana

2.3

NA

Massachusetts

NA

2.6

Maryland

2.4

NA

Maine

NA

NA

Michigan

2.6

NA

Minnesota

NA

NA

Missouri

2.7

NA

Mississippi

1.9

NA

Montana

NA

NA

North Carolina

2.3

1.6

North Dakota

NA

NA

Nebraska

NA

NA

New Hampshire

NA

NA

New Jersey

1.8

1.4

New Mexico

NA

1.5

Nevada

NA

1.6

New York

1.5

1.4

Ohio

2.6

NA

Oklahoma

NA

1.2

Oregon

NA

1.4

Pennsylvania

2.6

2.7

Rhode Island

NA

NA

South Carolina

1.9

NA

South Dakota

NA

NA

Tennessee

2.4

NA

Texas

1.8

1.2

Utah

NA

1.1

Virginia

2.1

0.9

Vermont

NA

NA

Washington

NA

1.1

Wisconsin

2.7

NA

West Virginia

NA

NA

Wyoming

NA

NA

Note: The table only reports data for state subgroups with sample sizes large enough to create accurate estimates.

Source: EPI analysis of Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) data and Current Population Survey (CPS) data

With regard to recovery, the African American unemployment rate in the third quarter is at or below its prerecession level in 12 states: Arkansas, California, Indiana, Michigan, Missouri, Mississippi, New Jersey, New York, Ohio, South Carolina, Tennessee, and Texas. But this numerical “recovery” must be put in proper context because with the exceptions of Texas, New York, New Jersey, and Tennessee, each of these states also had black unemployment rates that were among the highest in the nation before the recession. Of the states where the black unemployment rate has recovered, Indiana, Michigan, Missouri, Ohio, and South Carolina, have black unemployment rates lower than the third quarter national average for blacks (8.4 percent). Similar to last quarter, the black unemployment rate remains most elevated above its prerecession level in Pennsylvania and Alabama (4.4 and 3.7 percentage points higher, respectively). Before the recession, the African American unemployment rate was 7.2 percent in Pennsylvania and 6.3 percent in Alabama.

Trends among Hispanics

In the third quarter of 2016, the Hispanic unemployment rate was highest in Pennsylvania (11.8 percent) and lowest in Virginia (2.8 percent). (These states maintained their ranking from the second quarter.) The Hispanic unemployment rate is at or below its prerecession level in 10 states: California, Colorado, Florida, Georgia, North Carolina, Nevada, New York, Texas, Utah, and Virginia. The Hispanic unemployment rate is within 0.5 percentage points of its prerecession level in Connecticut, New Jersey, and Washington. It is a sign of a more meaningful recovery in Colorado, Florida, Texas, Utah, and Virginia that the Hispanic unemployment rates lower than the national average. The Hispanic unemployment rate was most elevated above its prerecession level in Arizona and Illinois (2.3 and 1.8 percentage points higher, respectively).

The Hispanic unemployment rate is lower than the white rate in Virginia (with a Hispanic-white unemployment rate ratio of 0.9), while the Hispanic-white unemployment rate gap is largest in District of Columbia, where the Hispanic unemployment rate is 3.0 times the white rate. This ratio is up from the previous quarter (2.0) as a result of a 1.2 percentage point increase in Hispanic unemployment while white unemployment dipped down 0.1 percentage point.

Trends among Asians

The Asian unemployment rate was lowest in Hawaii (2.8 percent) and highest in Nevada (8.0 percent). Hawaii has had the lowest Asian unemployment rate for four consecutive quarters. The Asian unemployment rate remains most elevated above prerecession levels in Nevada (5.1 percentage points). The Asian unemployment rate was below the prerecession levels in California, Illinois, and Washington, and within 0.5 percentage points of the precession levels in Hawaii and New York.

Methodology

The unemployment rate estimates in this issue brief are based on the Local Area Unemployment Statistics (LAUS) and the Current Population Survey (CPS) from the Bureau of Labor Statistics. The overall state unemployment rate is taken directly from the LAUS. CPS six-month ratios are applied to LAUS data to calculate the rates by race and ethnicity. For each state subgroup, we calculate the unemployment rate using the past six months of CPS data. We then find the ratio of this subgroup rate to the state unemployment rate using the same period of CPS data. This gives us an estimate of how the subgroup compares to the state overall.

While this methodology allows us to calculate unemployment-rate estimates at the state level by race by quarter, it is less precise at the national level than simply using the CPS. Thus, the national-level estimates may differ from direct CPS estimates.

In many states, the sample size of these subgroups is not large enough to create an accurate estimate of their unemployment rate. We only report data for groups which had, on average, a sample size of at least 700 in the labor force for each six-month period.

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